Choosing Your Financial Environment: Equity Finance or Forex Finance
Right. Now there are two decisions that need to be made that lay before you on the table; you have a total of four options. You must first choose your financial trading environment. Next you must decide if you are going to trade your own financial’s or if you are going to hire a firm of money managers to do that for you. After that, I am going to warn you, “Be very careful.”
The “Equity” Financial Environment:
This environment of finance is comprised of everything you thought “trading or investing” to be. It is “Wall Street.” However, equity finance dives much deeper than your common understanding of the finance’s of Wall Street. You are going to be aiming your focus primarily on Stocks & Mutual Funds. There are in fact many other financial securities like options and commodities, but we must leave them aside for now.
If one were to engage in and choose the financial environment of the Stock Market, they would need to focus on either one or both methods of individual stock analysis. They are, “Fundamental & Technical Analysis.” These two schools of financial thought and action are the driving forces behind each and every trade made on a daily basis. Fundamental Analysis focuses on the specific financial data of a company; balance sheets, annual and quarterly earnings reports, cash flow statements, and your fundamental financial data such as, but not limited to: PE, Forward PE, Trailing PE, Dividend Yield, BV, BV Per Share, Volume, etc. There are many financial calculations that can be learned, and each one has a specific meaning and adds to weight to your decision making process.
A Technical Analyst is trader who concentrates on the visual financial data drawn from charts. If one is to undertake this method, I suggest from experience, always to use Candle Stick charts – as time progresses you will see why. When viewing a chart and the movement of any particular finance, one can overlay something known as an indicator over the current price action. There are thousands of indicators out there, but the main few are: MACD, RSI, SMA, & EMA. It may be easier or in fact harder for you to under-go this finical analysis route, but it is all up to you as an individual and what works best for you. Who are you? A visual learner; a mathematician; perhaps a bit of both: maybe neither?
After looking at the two types of ways to analyze your interests in certain finances, you then would calculate risk and make your investment or trade. Each day you should watch, follow, analyze, and re-analyze your position(s).
Inside of “Equity Finance” you will also be building something known as your Financial Portfolio. This is comprised of 3-5 stocks that you have chosen. I say three to five for this simple reason; I am writing from the most basic point of view, by now, any experienced financial investors or traders will have stopped reading this and gone onto our more advanced section – Thus, I say 3-5 financial securities as a good starting place for your portfolio. Make sure you diversify.
In the end you will either see an overall green or red highlighted number representing your total investment value.
The “Forex” Financial Environment:
Forex Finance can seem somewhat simpler as a whole, but it is ten times more complex when you begin to work on a trading system; it had a tendency to unfold on top of you, so to say. This is mainly because you do not want to be “investing” in forex, you want to be day-trading and turning daily profits.
Forex Finance or Foreign Exchange Finance is act of buying or selling “International Currency Pairs.” One for example, “USD/EUR” is the US Dollar against the Euro. When purchasing this “Financial” you are doing so via leveraged money, so the risks are increased – however, the potential for rewards are increased ten fold as well; but only in the hands of an affluent trader or one who is keeping tabs on the Global Financial News. To neglect finance news in any way, shape, or form is to handicap and hinder yourself greatly. It is said that you, “Buy on rumors and sell on news.” (Just a saying to keep in mind from us financial folk.)
Forex Finance can be extremely dangerous and must be handled with care, caution, and a plan. Once a plan is established, you will do just fine.
By Myself or With a Team (Financial Firm)?
After researching and choosing a proper financial environment fit for you and your money you will then need to decide if it is right for you to handle your own financial investments or for a firm to handle them for you. There are many types of firms out there as there are individual trading platforms.
If you go the route to hire a Financial Firm to trade your money you will need to do a risk assessment on your environment. For Equity Finance: do you want high risk Hedge Funds or Low Risk Mutual Fund diversification? This is all up you.
To trade by yourself, you will need to learn and learn a lot. The main benefit of solo trading is to be able to treat it as a job and generate a daily income, you are in full control. On the other hand you can engage in solo financial investing. An investment trade executed on a solo platform can cost on average $7.00 where as a Firm’s Financial Broker may charge $75.00 or more. Firms can also have a set minimum limit to $100,000.00 as an initial financial investment.
In the end your choice has to be one or the other if you seek large sustained financial growth. The ability to command the world of “Finance” is an art form that can easily be learned with the proper resources. Just as easy as it is to learn, you can also research a proper fund to tend to your needs of finance.
By: AYF Financial Inc. Your Financial Safe-Haven & Source To Leading Global Financial Resources
Property Of AYF Financial Inc. – All Rights Reserved
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